Coopers sweetener leaves Lion with a sour taste

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Lion Nathan believes Coopers' dividend flow is just a trickle.Photo: David Mariuz

Coopers Brewery, fighting off a $352 million, $260-a-share
hostile takeover bid by Lion Nathan, has tripled its dividend after
announcing that its profit had soared 51.3 per cent.

And there could be more sweeteners to keep shareholders onside,
with the company flagging another buyback.

The Adelaide brewer yesterday reported a net profit of $14.3
million in the year to June 2005, compared with $9.5 million the
year before, on revenue of $127.2 million, up 18.2 per cent.

The final dividend jumped from $1.05 a share to $3, fully
franked.

Lion Nathan chief executive Rob Murray said Lion Nathan's bid
was obviously having a positive effect on shareholders, although
shareholders would be wondering whether the figures represented an
acceptable yield for a $260 share.

"Shareholders would also be asking themselves whether Coopers
would have upped their dividend if Lion Nathan did not have a bid
on the table," Mr Murray said.

"They will be further asking themselves, given the low dividend
payouts over the years, what incentive Coopers management would
have to give them if Lion Nathan were prevented from buying shares
in the future."

Coopers managing director Tim Cooper said that in the 10 years
since SA Brewing had sold its stake in Coopers and the company had
been operating as an independent business, Coopers' beer volumes
had tripled in a market that was in decline.

"We believe we have a significant competitive advantage over
Lion Nathan's South Australian Brewery, which is now operating
significantly below its capacity," Dr Cooper said.

He said the bigger dividend reflected the company's financial
strength and low debt. "Given the strong increase in financial
performance and the value of the company over the past couple of
years, and the low levels of debt now that we have effectively paid
down all of the borrowings taken on in 2001 to fund the development
of the new brewery at Regency Park, the directors considered that a
substantial increase in dividend was warranted."